iPhone could be ‘last man standing’
A prominent financial analyst has a new twist on the smartphone race, including some different ideas about the likely fates of Windows Phone 7, the several Android clones, and Apple’s iPhone.
Charlie Wolf, an analyst with Needham and Company, has consulted his crystal ball and come up with some slightly different insights into the smartphone wars than most of his brethren on The Street. He says, on a broad-stroke basis, that Google’s Android and Microsoft’s Windows Phone 7 will be competing for limited space on handsets while the smartphone marketplace holds a “race to the bottom,” possibly leaving Apple’s iPhone as the “last man standing.” He sees Microsoft and Google competing directly against each other to sign smartphone manufacturers to use their operating systems.
Wolf’s latest memo to investors, according to an AppleInsider story, said in part, “In the short run, the turf war could put the smartphone manufacturers in the driver’s seat. Ultimately, however, commoditization, accompanied by deteriorating prices and gross margins, appears inevitable for licensees of the Android and Windows Phone 7 operating systems. With its growing brand equity, the iPhone could end up as the last man standing in this race to the bottom.” He sees this battle as involving most manufacturers, including HTC, Samsung, Motorola, LG and Sony Ericsson.
Wolf is nowhere near counting out the Windows Phone 7 operating system in what he sees as a war between Microsoft and Google’s android for second place behind the iPhone. He is especially impressed with Microsoft’s willingness to spend big money on marketing, reportedly some $500 million. Wolf says, “We suspect the company will devote a material portion of it to buy the support of the leading smartphone manufacturers. Indeed, if Windows Phone 7 is successful, it’s difficult not to conclude that the Android platform will be impacted more than any other operating system because of the similarity of the two licensing models.”
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